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A shiny conversion with a graffiti goodbye

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March 7, 2005 // UPDATED 1:52 pm - April 26, 2007

By: Jeremy Stratton

Jeremy Stratton

The Sexton Building at 521 S. 7th St. hasn't changed much since it was built in 1926. The six-story brick building's elevators and hallways seem to transport one to the middle of the last century. In the basement, nearly opaque, cracked windows filter sunlight and a subterranean sidewalk view of the Elliot Park neighborhood.

Much of that will change now that the Sexton's $30 million condo/retail transformation has begun. By late fall, the building will sport 131 units, a new penthouse floor, a four-story parking ramp and a new look.

Like countless other Downtown conversions, the Sexton's switch meant that the building's former tenants - an assortment of retail and small businesses and artists - had to relocate. Mike Roess, a conversion veteran and marketing partner for the new owners, Swervo Development, called the transition "one of the better situations with moving out."

However, a spree of pre-exit-date vandalism - broken windows, emptied fire extinguishers, kicked-in doors, and stolen paint supplies used to deface walls throughout the building - marred any good vibes and highlighted the tension between the old and new Downtown.

One piece of graffiti said "F*** condos"; Roess said that was isolated and the vandalism "seemed more directed at other tenants, rather than the project."

Minneapolis Police spokesman Officer Ron Reier said former owner and current Building Manager Bob Andrews' management office had sustained damaged desks and computers. The police report mentioned several other damaged units. Andrews said that a model condo unit was among those broken into and damaged.

Andrews called it "wanton destruction ... without a reason," adding that "the political stuff" appeared to be a separate incident by "artists just mad at the conversions."

According to Andrews, two tenants held separate move-out parties the weekend of Feb. 26-27. One featured illegal alcohol sales and apparently got out of hand. The police report stated that officers responded to a call around 1 a.m. to find a "large party" and found two empty beer kegs. They broke up the party and made no arrests.

The officers returned an hour later and arrested 20-year-old Nicholas Tymeson and 26-year-old Aarn Wojack, both from South Minneapolis, in a stairwell. The two men were charged with burglary of a business and narcotics and booked in the Hennepin County jail.

Reier said that there were "several parties going on," and "a lot of officers" were called in.

Roess said that the damage does more harm to remaining tenants than to development efforts.

"I feel bad for some of the people that were here in the building," he said. "They lost a lot of their property. These people don't have a lot of money."

Andrews' view isn't as charitable. "I feel upset," he said. "It's kind of personal; I let these young artists in, gave them space. It's disappointing that there's an element that would be so destructive."

The conversion

The Sexton's new tenants won't be starving artists. The renovated building will feature first-floor "live/work" units that are 1,300-3,500 square feet with glass storefronts, costing $215,000-$450,000 each. Larger live/work units include basement space with below-street-level windows.

David Fields, a development coordinator for Elliot Park Neighborhood, Inc. (EPNI), called the live/work units a unique aspect of the conversion. Fields and Roess noted that some tenants, especially artists, lived in their units illegally, despite commercial zoning - common over the years in Downtown.

Five live/work units have been sold; four to businesses and one to a resident, Roess said.

Seventh-floor penthouses ($400,000 and $700,000) will be built atop the existing roof. A 3,000-square-foot rooftop courtyard will be open to all tenants.

The in-between floors will feature "cost-effective" units; 750-1,100 square feet for $160,000-$280,000. All of the $160,000 units are sold, Roess said.

The parking ramp at South 8th Street & Portland Avenue will have 155 private spots. A lot nearby will offer 12 or 13 retail and guest spots.

The deal could be quite lucrative for Swervo and partner JJT, LLC. Swervo bought the property - assessed at $2.4 million in January 2003 - from Andrews last fall at an undisclosed price. Roess said that Swervo hopes to make "somewhere in the high 30s [million dollars]" on the $30 million redevelopment.

Developers have eyed the property before, but Roess and Swervo's Ned Abdul got city approval to renovate the building, rather than it tear down

"I'm an adaptive reuse guy," said Roess. "I like old buildings."

(Swervo's next conversion project: the Whitney Hotel, 150 Portland Ave., which will become condos.)

Tenants first learned of the Sexton's sale Sept. 1, in a letter from Andrews. The letter that stated the building's use would "not change for a period of time, and Andrews, Inc. has a lease for its office and storage through June 30, 2005."

Photographer Dan Marshall, who left his sixth-floor space March 1, said, "We were sort of led to believe we would be able to be here until June."

The letter also stated that the new owners "idea" of converting to condos "is not a sure thing," concluding that "the new owner will not have any firm knowledge of [the conversion's] possibility until January 2005, and you will be kept up to date. Before it can even start conversion or construction, the new owner still needs to presell at least 50 percent of the planned units."

This happened sooner than expected, Roess said. On Dec. 27, 2004, tenants received a "notice to vacate and terminate lease" letter from new owner Sexton 1, LLC that gave them 60 days to move out.

"It was a bit of a surprise," Marshall said. "The overall feeling has been that communication between the new company and [previous owner and current management] Andrews has not been the best. Tenants have ended up being ill-informed."

EPNI's Fields said the neighborhood organization worked with the developers to ensure that tenants were notified properly.

Developers "defer to the neighborhood," he said. "They find out that they're going to have to, once we get our task forces going. People get concerned and upset if tenancy is up in the air."

Relocation roulette

Ted Hefty, owner of Ostroot Printing and Hefty Graphics, 521 S. 7th St., may have taken the biggest hit in the Sexton deal. His plans to purchase a building for his business "went by the wayside" when he learned he had to be out in March, not June.

Hefty now rents space at 3100 N. Pacific St., near the Mississippi River, just south of the Lowry Bridge.

The street-level Eagle Magic and Joke Store is perhaps the Sexton's best-known tenant, a fixture since 1969.

Owner Larry Kahlow hasn't decided yet where to relocate. Larry assures customers that the magic shop - the country's oldest, he claims - will not disappear into thin air. He hopes to remain Downtown, but he expects to pay more than he has at the Sexton, where he rented from the Andrews family for many years. "Rents were very reasonable," he said.

Kahlow said he was paying around $750 per month for his 1,200-square-foot space. In his early relocation search, he's seen rents twice and even three times as much as he's been paying.

Former Sexton tenants will find it virtually impossible to find such low rents for Class C office space in Downtown or Elliot Park, Fields said.

"It makes it difficult for a lot to even relocate," he said. "I wish there was more Class C office space in Downtown. There are a lot of buildings and spaces that potentially could be [used commercially], but the difficulty is getting present owners to rehab those spaces or make them open to commercial businesses."

The Taste of Thailand restaurant also finds itself hunting for new digs. It will remain open until the end of March, according to supervisor Noah Inthichack, then close for at least a month until owners can find a new location, hopefully Downtown.

At Eagle Magic, Kahlow said he will "actually physically miss this spot. I've been standing in the same spot down here for 36 years, eight, nine, 10 hours a day. I've been here longer than any of my homes, longer than I've known my wife, my children."

Still, he remains optimistic about Eagle Magic's chances - it is, after all, the seventh relocation in the store's long history.

"We've had to move in the past, and we will in the future," said Kahlow. "That's business in the big city."